WA: Strata Industry at Risk – Workplace Safety

This article is about the new Workplace Safety legislation recently update in Western Australia and what it means for WA strata schemes and the strata industry.

In recent times there has been a lot of discussion around Workplace Safety which in part, has been driven by the new Work Health and Safety (WHS) Act 2020 legislation that came into effect 31st March 2022 in WA.¹

The reason for this added interest is that there are now new penalties which can see fines imposed of up to $5 million dollars and 20 years jail for an individual and $10 million for a body corporate. This applies to those with a WHS duty where their conduct in failing to comply with that duty caused a death or serious injury.²

The purpose of this article is to highlight that you cannot consider each Act in isolation. There is numerous legislation that imposes responsibilities and liabilities on the strata industry which have been in place for decades and, by and large, we have not been considerate enough of what this means.

Last year, a Director of a business was jailed after pleading guilty to gross negligence leading to the death of a worker and the serious injury of another under the old Occupational Safety and Health Act 1984³. This is one of many cases that has led to the prosecution of people in charge of a workplace and/or a worker.

Person in charge

So, who is responsible and ultimately liable?

We have been lucky in that Wal Dobrow from BIV Reports has undertaken a number of presentations to SCA members and published several articles on the WHS legislation and Workplace Safety.⁴

The new term that has now been introduced, and we must become familiar with, is a Person Conducting a Business or Undertaking (PCBU). A PCBU may be an individual or an organisation and may extend to the:

• Strata company;
• Council of the strata company;
• Owner of a lot in a strata company;
• Volunteer helping a strata company;
• Strata manager, including the strata management business;
• Building manager or facilities manager; and
• Contractor or service provider being engaged by the strata company (via the strata manager), including both the employer and employee.

A PCBU is involved in the management or control of repairs, maintenance and servicing of the plant and equipment at a workplace. In the case of the WHS Act, this may exclude a resident living in strata, but there is other legislation that may still imply a legal liability when it comes to workplace safety, for example, Occupiers’ Liability (OL) Act 1985 (s. 5)⁵

Workers

So, who is a worker?

Recently, Anthony Quahe from Civic Legal wrote a great article on the Workers Compensation and Injury Management (WCIM) Act 1981⁶ in the LookUpStrata ‘The WA Strata Magazine – April 2022’ edition.

In this article, Mr Quahe explored that liability may exist for a strata manager or strata company if someone is deemed a worker under the WCIM Act, even though there is no contract of employment between the two.

The biggest takeaway is the definition of a ‘worker’ and the extended definition that includes individuals who work under a contract for service and may include labourers engaged under a contract, sub-contract, or on a casual basis, and are not employees of the strata manager or the strata company.

I would suggest that if you are sending a work order to a contractor to undertake a task on site and this work order is being issued by the strata manager on behalf of the strata company, then both parties owe a duty of care to the contractor who attends.

Workplace

So, how is a workplace defined?

Under the WHS a workplace is a place where ‘work is carried out for a business or undertaking and includes any place where a worker goes, or is likely to be, while at work’.

The WHS provides exemptions for a ‘residential’ strata company and more broadly, other legislation also alludes to exemptions for residential schemes. The exemption for residential schemes exists because around 50% to 60% of strata comprises less than ten lots and the common property is limited to a shared driveway.

These small schemes typically do not engage a strata manager, are self-managed and it is fairly argued that there should not be this onerous liability imposed on homeowners.

The concern is that most residential strata companies that engage a strata manager, do so because their scheme is more complex, and requires more than just managing a part-time gardener and taking out insurance each year.

This is particularly relevant for those schemes that have extensive common facilities and complex plant and equipment that may extend to pools, gyms, waste management systems, lifts, central hot water and air-conditioning systems, car stackers, and the list goes on.

These sites are busy workplaces with contractors and service technicians coming in and out daily. I struggle to see how these residential schemes can be exempt from owing a duty of care to the contractors engaged.

Duty of care

So, what is a duty of care?

The most relevant Acts that define a duty of care are the WHS Act (s. 19), the Civil Liability (CL) Act 2002 (s. 5B)⁷ and OL Act (s. 9).

Under WHS, a PCBU that engages a worker or influences or directs the activities of a worker in carrying out their activities on site, so far as is reasonably practicable, must ensure:

• The provision and maintenance of a work environment without risks to health and safety;
• The provision of adequate facilities for the welfare at work of workers (which may extend to workplace bullying and mental health); and
• That the health of works and the conditions at the workplace are monitored for the purposes of preventing illness or injury.

I think it is important to point out that it is not just the strata company, and by default the strata manager, that has a duty of care. If a landlord, and by default the property manager, engage a worker to undertake work within the owners lot, then section 9 of the OL, ‘Duty of care of landlord’, imposes similar obligations.

Obligations

So, what do I need to do?

The QIA Group published a great article in the LookUpStrata ‘The WA Strata Magazine – March 2021’ edition⁸ which highlights the strata company’s (and by default the strata manager’s) obligations that now exist, including the need to:

• Access the risks on site and identify any hazards;
• Manage the risks identified;
• Qualify the qualifications of the contractors being engaged, including licensing, insurance and other necessary qualifications.

Identifying the risks on site is an obligation imposed under the legislation and is also a condition we are now finding is being imposed by the insurer. The insurer will endeavour to mitigate their exposure to a scheme, and in doing so, we are finding that in some cases they are inspecting sites, identifying items of concern and requesting a range of safety reports before offering cover. When offering cover, they will list maintenance obligations and impose limitations within the policy until concerns are addressed.

By ensuring a scheme has these reports available and stays on top of its obligations to maintain the improvements, there is the ability to expedite the re-insurance process and potentially achieve a more competitive tender.

Safety Reports

So, how can I ensure my scheme is safe?

There are a number of organisations, including both BIV Reports and QBE, that can assist in the assessment and preparation of safety plans, WHS reports and asbestos reports.

Additional safety reports that are regularly requested may include:

• Electrical certificates;
• Thermal imaging scans;
• RCD testing (should be tested every 12 months, in accordance with AS/NZS 3760);
• Fire evacuation plans; and
• Cladding audits, for example.

It is important that the strata company, and by default the strata manager, ensures this information regarding any incidents, hazards or risks is available to the person undertaking the work (s. 27(5)(d) of WHS).

Exemption from Liabilities

So, can I be exempted from some of these liabilities?

There is s. 141 ‘Protection from liability’ in the Strata Titles Act 1985⁹. The exemptions allude to a person acting in good faith, but if you are acting in ‘good faith’, then by legal definition you should have due regard to the rights and interests of the other party.

Noting there are other exemptions in the legislation for residential schemes, I continue to argue that if the common facilities are more extensive than just a driveway, then under a myriad of legislation, including your ethical responsibility and need to act in good faith, I believe there is still an implied obligation to ensure that both the strata company and the strata manager are appropriately identifying and managing hazards on site.

Trying to put this into context, if I’m a worker, and you as a member of the council of the strata company suspect there may be asbestos within the scheme, I would argue you have a duty of care to confirm your suspicions and ensure that I’m informed of the hazard, thus ensuring my rights and interests are protected when you send me a work order to attend site.

I raised the potential liabilities that may exist around workplace safety management with Landgate during a recent Reforms review meeting. They acknowledged that this was something that needs to be more broadly considered during the 5-year review. It is very hard to define where, and if, there are boundaries within the exemptions applied to residential schemes, however, Landgate made the determination that a 10 Year Maintenance Plan is required for a scheme with more than 10 lots or the replacement cost is more than $5million because they believed these schemes were more at risk of not adequately maintaining their improvements, thus this might be used as a benchmark for residential schemes when it comes to workplace safety.

I fully disclose that I am not a lawyer and only have a basic understanding of employment and WHS legislation, but I feel by and large we as strata managers are likely failing in our duty of care and need to be more diligent around how we engage contractors. They also have families and want to make it home safe each night.

Scott Bellerby
B Strata
E: [email protected]
P: 08 9382 7700

This post appears in Strata News #567.

References

1. https://www.legislation.wa.gov.au/legislation/prod/filestore.nsf/FileURL/mrdoc_43434.pdf/$FILE/Work%20Health%20and%20Safety%20Act%202020%20-%20%5B00-00-02%5D.pdf?OpenElement

2. https://www.dmirs.wa.gov.au/sites/default/files/atoms/files/overview_wa_whs_act_0_0.pdf

3. https://www.businessnews.com.au/article/Director-jailed-over-workplace-death-Are-you-potentially-liable

4. https://insidestrata.partica.online/insidestrata/inside-strata-spring-2021/flipbook/4/

5. https://www.legislation.wa.gov.au/legislation/prod/filestore.nsf/FileURL/mrdoc_27687.pdf/$FILE/Occupiers%20Liability%20Act%201985%20-%20%5B02-a0-02%5D.pdf?OpenElement

6. https://issuu.com/lookupstrataadmin/docs/lus_wa_april-22/22

7. https://www.legislation.wa.gov.au/legislation/statutes.nsf/main_mrtitle_149_homepage.html

8. https://issuu.com/lookupstrataadmin/docs/the_wa_strata_magazine___march_2021/10

9. https://www.legislation.wa.gov.au/legislation/statutes.nsf/main_mrtitle_938_homepage.html

Have a question about the new WA WHS legislation and what it means in your building or something to add to the article? Leave a comment below.

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Read next:

• WA: New WHS Legislation to be Introduced. What Does this Mean for Strata?
• WA: What does the new WHS Legislation mean for strata? VIDEO

DMIRS: Work health and safety laws – Information about WA’s new work health and safety (WHS) laws

This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.

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